Monthly Archives: January 2012

Recent research from Kingston University for the PCG has shown a strong growth in Freelancing in the past decade. Over the last 3 years there has been a 12% growth among independent professionals alone, proving to be not vulnerable workers but drivers of economic growth in the UK. The figures confirm that skilled and talented individuals are opting for freelancing as a work/lifestyle choice and also as a result of turbulent economic circumstances. Freelancers offer industry and commerce a flexible talent stream when and where it’s needed.

HMRC, in the face of a crippling strike from the PCS union which will see 80% of their call centre staff walk out on January 31st, have taken the decision to effectively extend the deadline until midnight on Thursday February 2nd rather than face complaints as a result of being mostly unreachable the day tax returns are due.

Reports by www.jobadswatch.co.uk show that IT recruitment has now been expanding for each quarter since mid 2010 and over the past twelve months vacancies have increased by 10.8%, but with most of the increase coming in the first quarter of 2011.

Demand for developers increased by 2.9% between the second and third quarters of 2011 an over the last quarter there has been an increase of 5.1% in the number of advertisements for freelance IT staff.

HMRC is reminding VAT-registered businesses that all VAT returns must be submitted online from this spring, meaning paper returns will soon be a thing of the past.

Currently, only newly-registered businesses and those with turnovers of more than £100,000 have to submit their VAT online, as well as pay electronically. Anyone else can send HM Revenue & Customs (HMRC) a paper VAT return, if they wish.

That is changing from April, when all 1.9 million VAT-registered businesses in the UK will have to submit their VAT returns online, and pay electronically, for accounting periods beginning on or after 1 April 2012.

Every VAT-registered trader not already required to submit online will receive a letter from HMRC in February, advising them of the change, and what steps they need to take.

As 2012 shows unemployment returning to levels last seen in the 1980s, freelancers and flexible workers are going to become more important.

These days more and more people are choosing to enter flexible working (freelance) and as a group are flexible, adaptable and quick to sieze opportunities making them increasingly vital to the UK economy.

New proposals have been published for any individuals, including umbrella company contractors, who are suspected to committing a tax fraud will no longer be immune from prosecution. These new proposals will take effect from 31 January 2012, however HMRC will still provide immunity for individuals who admit to fraud through the contractual disclosure facility.

Individuals who denies fraud or does not reply to an HMRC Code of Practice 9 query, could face criminal prosecution if investigators discover that they have committed fraud. Under the current regulations taxpayers are immune from prosecution in they are subject to a COP9 query.

Individuals who decide to own up to fraud through the contractual disclosure facility will need to disclose all the fraudulent behaviour and sign a statement confirming that they have provided all the relevant and necessary details and will pay all the tax, penalties and any interest due.

Please do not fall victim to ‘phishing’ emails sent out by fraudsters in the run-up to the Self Assessment deadline of 31 January.

Emails are being sent out telling the recipient that they are due a tax rebate. They fraudsters have provided a link to a clone of HMRC’s website where the recipient is then asked to give credit card or bank details.

Fraudsters then try to take money from the account using the details provided. Victims risk having their bank accounts emptied and their personal details sold on to other organised criminal gangs.

Should you receive such an email the HMRC are requesting that you send them to phishing@hmrc.gsi.gov.uk before deleting it permanently.

A: Yes, there have been changes to the penalties for the late filing of self assessment tax returns from tax year 2010-11 onwards.

Individuals who miss the self assessment filing deadline this year will be immediately liable for an automatic £100 late filing penalty.

Q: Will I still be charged if I don’t have any tax to pay?

A: Yes, this penalty will apply even if you don’t have any tax to pay.

These new penalties apply to all self assessment tax returns for tax years from 2010-11 onwards. The fixed £100 penalty for failing to file a tax return on or before the filing date will therefore apply to:

paper returns received on or after 1 November 2011

online returns received on or after 1 February 2012.

Daily penalties of £10 per day will also take effect if the tax return is still outstanding three months after the filing date.

A: You can join the Annual Accounting Scheme if your business is registered for VAT and providing you have reason for believing taxable supplies will be below £1,350,000 per annum. Should your taxable turnover exceed £1,600,000 per annum you must cease using the scheme.

The purpose of the scheme is to help small businesses by allowing them to submit just one return annually and in the meantime, pay fixed sums based on the previous year’s liability.

Q: How does the Annual Accounting Scheme work and what are its advantages/disadvantages?

A: As a registered business to the scheme you will need to make nine monthly payments of 10% of the total paid in the previous year and a balancing payment made in month ten or, if the business is newly registered, then the amount will be based on what you are expecting to pay in the next 12 months. Should you prefer, you can choose to pay 25% quaterly.

Payments will begin on the last working day of the fourth month of the Annual Accounting Scheme’s accounting year and they must be made by Standing Order, Direct Debit or any other electronic payment. Cheques are not accepted.

You submit your annual VAT return, together with any balance due to the VATman, two months from the end of the Scheme’s accounting year which means you get an extra month over the usual time limit which is applicable to a normal VAT return.

The advantages of the Annual Accounting Scheme are that you can manage cash flow better by paying a fixed amount in monthly or quarterly instalments so you know when and how much you have to pay. Additional payments can also be made so that you can mange your balancing payment should you think it may be larger than expected.

The disadvantages of this scheme are, should you regularly reclaim VAT, you will only get one repayment per year so this could damage your cash flow. Another disadvantage would be if your turnover decreases, your interim payments may be higher than your VAT payments would be under the standard VAT accounting, unless you apply to the VATman to have them reduced.

If interim payments have been set too high or low because of trading patterns, the VATman may agree to change them.